About 250 million migrant workers live outside the country they call home. A significant majority of them send money home, typically US$200 or US$300 several times a year. Adding together all the millions of transactions involved, remittances reached US$436 billion to developing countries in 2014.
Global remittances represent more than three times Official Development Assistance and often surpass foreign direct investment.
The first International Day of Family Remittances was celebrated on 16 June 2015, at the Global Forum on Remittances and Development in Milan. Patron of the Day is Her Majesty Queen Maxima of the Netherlands, in her capacity as United Nations Secretary-General’s Special Advocate for Inclusive Finance for Development (UNSGSA). The IFAD President, Dr. Kanayo F. Nwanze and Mr. Enrico Morando, Vice Minister of Economy and Finances of Italy, also participated as keynote speakers.
The International Day of Family Remittances was unanimously proclaimed by all 176 member states of IFAD’s Governing Council last February and is currently being submitted to the attention of the 70th session of the UN General Assembly for formal endorsement.
This observance recognized the significant financial contribution migrant workers make to their families back home, and is also an encouragement to do more to maximize the impact of these funds in the developing world.
Remittances are crucial for families. Often they represent more than 50 per cent of family income. These funds allow families to address their basics needs such as food, housing, health and education but also help them to raise their living standards above subsistence levels.
Furthermore, remittances can also be a powerful engine for development, in particular in rural areas where 40 per cent of the flows go.
When given the opportunity, rural families save and invest – even if only a small part of their income – in activities such as small businesses that help improve their lives. This can in turn contribute to job creation, better food security, and ultimately a better future for families and their communities.
But for remittances to work for families and for development, it is crucial to improve access to basic financial services such as savings and credit, but also to provide families with non-financial services adapted to their needs, such as technical assistance for business development or financial education programmes.
Remittances are also crucial in fragile states or disaster-affected regions. They are often the only income families have, and thus can play a role in the reconstruction and stabilization of those states.
The International Day of Family Remittances is an opportunity to highlight the immense potential of remittances for development.
It is also a reminder that more needs to be done on the receiving end of remittances to help families make more productive use of their money, in particular through better access to financial services, and ultimately to help them meet the economic, social and environmental challenges confronting their countries.